Governance and Democracy katarsis survey Paper

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purchase the share. (In addition, whenever possible, arrangements are made to ensure new 

members are given overtime to help them pay off these loans.)  

The co-operative is a private limited company which is structured to ensure members enjoy 

direct control over company policy on the basis of ‘one-share-one-vote’. Although the value of 

individual shares varies depending on when the member joined the co-operative, no member 

has more than 1 vote. 

The Board is comprised of 6 directly elected ‘working’ Directors two of whom have to stand 

for re-election each year. Only two of the existing Directors are members of senior 

management and all have to account for their actions at the company AGM. Beneath the 

Board, senior operational and engineering managers meet on a regular basis although 

‘executive authority’ remains the province of the Board that meets officially monthly, but 

often weekly. The mine manager – who enjoys a unique ‘legal authority’ equivalent to that of 

a ship’s captain – has never been a Board member. Annual elections to the Board and the 

extensive formal and informal work consultation processes serve to sustain an open discourse 

and democracy in all the dimensions of relationships within the Tower ‘space’. 

It is important to emphasise the significance of this break with past social practice. The 

continued usage of such traditional terms as ‘Directors’ and ‘the Board’ should not be 

permitted to obscure what is a radical shift in power relations with respect to the ownership 

and control of economic capital, for the organisational decision-making processes outlined 

above indicate a quite fundamental shift to bottom up democracy and accountability. British 

Coal, the previous owner, had a UK wide Board that effectively owned and controlled at that 

level. Mine management at Tower was accountable to a South Wales office based in Cardiff 

and then ultimately to British Coal. Managers were just ‘managers’: they were not directly 

responsible for the economic capital of Tower. The TEBO broke this link. The land, mineral 

assets and capital were legally vested in a cooperatively owned company, which also became 

the employer. Direct control is now in the hands of the on-site Tower Board – all of whom are 

working employee-owner directors. Power, once so distant and disembodied, is now local. The 

members votes decide operational policy and the collective enjoys direct responsibility for 

decisions and their consequences; the possibility of blaming distant bureaucracy is a luxury of 

the past. Thus, collective ownership, control and democratic accountability are the source of a 

different social space and community, enabling a redistribution of economic, political, social 

and cultural capital resources. 












Space in the Market  

For many producer cooperatives, the most troublesome spatial location they need to occupy 

successfully is ‘the Market’ for their goods or services. In this respect, Tower is fortunate for 

their product – anthracite – remains a valuable commodity and, because all the potential 

competitor mines have been closed, there are no effective alternative suppliers in their prime 

market. This product is the foundation of Tower’s power resources both in contract 

negotiation and in the consequent strategic freedom to choose how to deploy the revenue 

stream. The cooperative has been financially successful over its 10 years of operation. On an 

annual turnover of between £24m and £34m, annual profits have ranged from £1m to £4m. As 

coal prices have been steadily falling during this period of operation, revenue has been 

sustained by an increase in output from 380k tonnes per year to around 600k per year. This 

production level has been at a plateau between 2001 – 2004. Much of this success reflects the 

product being energy efficient high-grade anthracite.  

The main power station contract accounts for about 80 % of output and the retention of this 

contract is not only a considerable marketing success but has also been critical to securing 

control over the market context throughout the life of the cooperative. The Director of 

Marketing learned his skills ‘on the job’.  


The Space of Resource Allocation 

Perhaps the most ‘novel’ space now occupied by the members is their direct responsibility for 

financial decision-making. Although there is some limited profit distribution (but not every 

year), the vast proportion of the revenue goes on reinvestment and member rewards. The 

balance between these respective needs is not uncontested.  

Initially, a key objective was to pay back bank and government loans. Within the first year 

(1995-96), a £2m loan from Barclays Bank was repaid and by 2002 the final instalment of the 

£11.5m DTI loan cleared the last external debt. In addition, £2m a year has been invested in 

developing each new face. Innovative investments include a plant generating £1m worth of 

electricity per year from methane extracted from the colliery – this effectively pays for all the 

power consumed at Tower; and a new venture in making low carbon emission briquettes from 

sawdust and coal dust. More generally – reflecting Tower’s symbiotic relationship with the 

local community – the cooperative supports a range of local projects, including rugby, opera, 

motorcycle racing, schools, a children’s hospice and community regeneration. The leading 

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